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September 2016
News
window, such asmissed payments, or
defaults, or further debt triggers the
reviewprocess. The reassessment will
take into account this new informa-
tion on the applicant’s credit profiles
as well as any new debt obligations
entered into.
Nel adds, “This can result in repric-
ing of the home loan, a lower amount
offered or, in some cases, even declin-
ing the previously approved loan. This
can be a very distressing experience
for prospective homeowners; how-
ever, the reassessment is necessary
to protect the interests of both client
and bank.”
The result of over extending credit
puts potential home owners at risk
of foreclosure and some consumers
never fully recover. It could also dam-
age their good credit standing that
could compromise their ability to rent
a property.
Nel says that customers tend to
be overly optimistic about their level
of affordability and warns customers
against taking on any extra debt after
a home loan application has been
approved.
“Consumers do not always allow
themselves a margin of safety for un-
foreseen expenses or interest rate in-
creases when setting their household
budget. This reduces their ability to
recover from unforeseen expenses or
interest rate increases and some then
resort to taking up unsecured loans to
try and get back on their feet. How-
ever, in the absence of a disciplined
reviewof their expenditure levels, this
is likely to domore harm than good in
the long term.”
He suggests that a new home
owner waits until they are in their
new home and have lived there for a
fewmonths first. This way they can be
confident that their household budget
still balances.”
■
Taking on debt after home loan approval
Home loan customers are often
not aware that some banks
may continue to monitor their
credit profiles andperform
updated affordability
checks up until
bond registration.
T
he re-established Department
of Water and Sanitation’s call
centre hotline aims to provide
developers, builders, service provid-
ers, stakeholders and communities
with access to information about
the programmes and services of the
department.
The hotline will enable the de-
partment to receive and resolve
issues related to water-use regis-
tration and licensing; vandalism
and theft of infrastructure; treat-
ment plants and other problems;
illegal water connections; revenue,
billing and debt management; water
supply interruptions and other
issues as well as basic sanitation
supply and community sanitation
problems.
Given the recent water challenges
and constraints, South Africans are
urged to use the hotline as this will
assist the department to respond
to and accelerate service delivery.
The hotline number, 0800 200
200, is free of charge, easy to use
and convenient. It will operate in all
11 languages and is operational from
6am to 10pm during weekdays.
■
Water service delivery
T
his means
consumers
taking on
further debt after
they have received a
home loan approval
may find that the ap-
proved home loan
amount is reduced, re-priced
or declined all together.
Tommy Nel, Head of
Credit at FNB Home Loans,
says: “We have found that con-
sumers are often unaware that
taking out further debt after their
home loan is approved will trigger
a review on the home loan appli-
cation,” says Tommy Nel, head of
credit at FNB Home Loans. “We con-
tinually re-assess loans that have
been approved up until the bond is
registered in the Deeds Office and
the property is transferred into the
new owner’s name.”
Any new adverse information
listed against any of the appli-
cants during this bond registration
Tommy Nel